• Court Rejects Bank of America Effort To Dismiss Discrimination Class Action By Female Financial Advisors
  • October 4, 2012 | Author: Rachel Geman
  • Law Firm: Lieff, Cabraser, Heimann & Bernstein, LLP - New York Office
  • U.S. District Court Judge Joseph F. Bianco of the Eastern District of New York yesterday denied Bank of America's motion to dismiss a gender discrimination class action brought by current and former female Financial Advisors of Bank of America and Merrill Lynch challenging alleged discrimination in compensation and business opportunities. The complaint charges that these violations are systemic, based upon company-wide policies and practices.

    "Female Financial Advisors at Bank of America and Merrill Lynch now have the opportunity to pursue their gender discrimination claims - and show why their challenge to defendants' common policies should be given class treatment," stated Lieff Cabraser partner Rachel Geman. "Plaintiffs allege that defendants' account distribution and compensation policies are structurally unfair and inconsistently applied, creating stark, discriminatory, and very real-world differences in compensation and opportunities between men and women. We are especially pleased the court ruled that defendants could not escape legal scrutiny simply by labeling these policies as so-called 'merit' or 'production' systems."

    Bank of America sought to dismiss the lawsuit on various grounds. Bank of America argued that plaintiffs' class claims were precluded, as a matter of law, by the Supreme Court's decision in Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2551 (2011). The Court rejected this argument:

    "The fatal flaw identified by the Supreme Court in Dukes was that the class claims alleged discrimination by local managers exercising their broad, subjective discretion in the absence of any policies, which by its very nature could not satisfy the commonality requirement of Rule 23(a)(2). However, the Supreme Court made clear that a putative class could satisfy commonality, even where there is subjective decision making involved, if the subjective decision making was 'operated under a general policy of discrimination.' [Citation omitted.] That is precisely what plaintiffs allege here. In the third amended complaint, plaintiffs assert that specific employment practices - namely, the criteria of the compensation and account distribution systems - systematically favor male Financial Advisors at BOA, and result in a discriminatory impact on female Financial Advisors." (Order, at 2.)

    Bank of America also argued that plaintiffs' disparate impact claims should be dismissed in their entirety pursuant to section 703(h) of Title VII of the Civil Rights Act of 1964, 42 U.S.C. ยงยง 2000e et seq. ("Title VII"), which allows employers to maintain compensation systems that reward employees based on production or merit even if those systems otherwise have an adverse impact on a protected group. The Court rejected Bank of America's Section 703(h) argument, finding that plaintiffs sufficiently alleged a disparate impact claim that was not barred by Section 703(h) of Title VII: "Plaintiffs here allege that (1) the compensation and account distribution systems are not merit or production based, but rather are governed by tainted and discriminatory criteria, and (2) defendants intentionally discriminated in implementing these policies. Such allegations are sufficient to survive defendants' motion to dismiss and/or strike the class claims." (Order, at 2.)